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The Greek tourism industry is bracing for a steep drop in business
this year, projected at 10-20 percent.

According to Andreas Andreadis, president of the Panhellenic Hoteliers’ Federation
(POX), the fall in bookings for package holidays in Greece so far this
year ranges between 20 and 30 percent.

He notes that, despite a number of measures the government has already
announced for boosting the country’s tourism industry and discounts
widely offered by hoteliers, a 10 percent drop for the year as a whole
should be considered a success.

Such a decline would be one of the five steepest in the last 60 years
and the sharpest since 1996. It would mean a decrease of 1.5 million
visitors to about 14 million.

What is more, tourism industry representatives calculate that any drop
in the number of visitors would mean a big decline in revenues. A 20
percent decrease in the number of visitors, according to the pessimistic
scenario, would mean a loss of about 5 billion euros in revenues for
the economy as a whole. Of this amount, 1.4 billion would be sustained
by the hotel industry alone.

The Institute of Tourism Research and Forecasts calculates that 10
percent fewer foreign visitors will mean the loss of 96,000 jobs in
the economy as a whole.

As a result of the already marked drop in demand, a large number of
hotels have decided not to open for business this Easter season, while
others will open only for the holiday period and then again in early
summer.

According to hoteliers’ representatives, the discounts offered
for this Easter period amount to as much as 20 percent compared to
a year ago. Despite this, the drop in bookings from abroad is up to
30 percent in some areas.

However, much of this decline is likely to be offset during Easter
by an increase in domestic tourism, as more Greeks are opting to take
holidays in Greece rather than go abroad. This was evident during the
Christmas period, with guesthouse operators across the country reporting
a rise of around 20 percent in the number of Greek visitors.

Local hoteliers and restaurateurs in Rovies, Evia, recently signed
a quality pact, vowing to improve services and reduce prices in an
effort to attract customers during this difficult period. An apartment
is rented for 60-65 euros a night and a double room for 50-55 euros.
In other more developed resorts, where the pinch is likely to be felt
more strongly, the cuts are even steeper. On Rhodes and Santorini,
for instance, double rooms are going for as low as 40 euros; in Myconos
it’s 60 euros, in Halkidiki 70 euros and in Hania 45 euros.

The government last week announced the waiving of usage charges for
airlines in the country’s regional airports in the April-September
period as an incentive to foreign tour operators.

Andreadis says this measure needs to be supplemented by a cut of 3
percent in value-added tax for tourism services, which would bring
about a significant reduction in the cost of packages.